• Holiday Mail

    By • Dec 26th, 2007 • Category: Pure Content

    When I get mail directly, rather than in the comments, it often prompts me to review my approach to the blog, my motivations and my true feelings. Sometimes I change something, sometimes I don’t. I’ve been accused of being an accountant hater, a malcontent, a disgruntled ex-employee, a whiner, an idiot and, one time, the Sage of Omaha.(That one was meant for someone else…)

    Today I received a very thoughtful email from Mike Harris, CPA, ESQ. With his permission, I’ve reprinted it below.

    Mike writes:

    Francine, I’ve been reading your blog for a while and while I do enjoy it, it seems that you have this particular dislike of BDO. Whenever you get a chance to dig into them somehow or post something negative about the firm, you do not hesitate. Why is this? Were you burned by BDO the firm or a partner somewhere along the way? Do you think they overstep their bounds and should be sticking with smaller engagements? Do you believe they are just there for the buck and are the first ones to say yes when some public company goes opinion shopping?

    I spent several years with BDO before leaving public accounting and my experience up to the senior associate level was for the most part positive and dare I say somewhat enjoyable. It doesn’t appear you worked there so I am not sure how you developed, from my perspective, this disgruntled employee image.
    Take Care,
    Mike Harris CPA, Esq

    Here’s my response:

    Hi Mike. Thanks for writing.

    I don’t have any animosity for any of the firms, except for maybe a little for PwC. I worked there most recently and (although I met some great people) the (mixed) experience is what led me to do the blog in the first place. My interest is in highlighting what’s going on in the firms, focusing on the Big 4, at the management level. Unless you have been a senior partner at a firm, managing a major client, practice or office, you could live out your days blissfully ignorant of the inner workings of the Big 4.

    BDO has, unfortunately for them, been in the news more often recently than the other next tier firms. They are very vulnerable now due to the judgement against them and a very risky choice for a company as an auditor, in my opinion. I did write about GT with regard to Refco. It wasn’t pretty. I have been accused of having a vendetta against each of the firms, especially KPMG, at times. It’s just the way the stories roll. KPMG has had their share of problems, but I liked the firm a lot when I worked there. It’s not the people, it’s the model and the senior management I am commenting on.

    No, I don’t think the next tier firms should be auditing the large, complex global public companies, especially financial services. They just don’t have the firepower. I have quite a bit of experience working for one of the other next tier as a client of my firm. That’s where that feeling comes from.

    The blog is a critique of the firms and their model of doing business. I’m more often negative and sometimes a little dramatic because that’s what attracts readers. I plead guilty.

    I hope you keep reading. I appreciate the feedback.
    fm

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    6 Responses »

    1. Although it’s no doubt correct to point out that you need to work at a high level to gain a full appreciation for the inner workings of big firms, it’s surprising how much you can gain from a ‘worm’s eye view’ position if you talk to and subsequently know enough people in varied positions throughout the company. :)

      As for your “tone,” some posts come across as ‘flames’ of the Big 4 from time to time that won’t get taken too seriously by the ‘old-timers’ (a.k.a., anyone who’s spent more than half their life online, or 14+ years).

      Newcomers to the online world, who take everything you say at face value will respond the way Mike does, and be rather shocked.

      Watching the reactions is, and I mean this in a complimentary way, similar to the fun in watching somethingawful.com rip things apart, often just for the joy in seeing peoples’ reactions.

    2. I have no problem with smaller firms auditing large financial entities. KPMG “audits” Citigroup and failed to insist Citigroup disclose its liquidity puts. Would BDO have done worse? I have had professional contact with KPMG and BDO. I prefer dealing with BDO. I see no anti-BDO bias in your blog.
      I figure the Big Four will, when push comes to shove do worse audits than smaller firms. Why, just like Citigroup, they “are too big to fail”.

    3. Did Francine even report the problems with the BDO audit of the Washington DC tax office.

      DC Tax Scandal – November 2007

      As of November 14, 2007, it is estimated that over 30 million dollars were scammed by tax officials since 1999. At the height of the scam, half of the property tax refund checks were fraudulent. The average legitimate check was less than $10,000 while the average scam check was over $300,000. “The scandal may also singe BDO Seidman, a private audit firm that gave Gandhi its seal of approval earlier this year. Its auditors were paid millions to go over the city’s books and gave Gandhi’s office an unqualified opinion”

      http://www.examiner.com/a-1038178~Missing_tax_dollars_raise_eyebrows.html

    4. I am surprised anyone could suggest that Francine flames the Big 4, or anyone else.

      Some might say I do on http://www.taxresearch.org.uk/blog from time to time – but always with reasons given, and Francine is more reasonable still in providing explanation for her comments.

      If someone feels flamed is it that they can feel the heat turning on them? And in that case, might it be more appropriate to undertake some self assessment than suggest the criticism is inappropriate.

      After all, many things in life that are harmful are enjoyable whilst participating. That’s no justification for doing them. That’s just hedonism, and at its core that is the problem that the big firms (and BDO) face.

      Richard Murphy

    5. I’m with Francine and Richard on this. The ‘worms eye’ view tells me that these firms have great people. That’s true of all organizations. Francine reserves her fiercest attacks for those that can take it and who in many cases deserve it.

      When you look at recent history, it’s fair to say the standards by which some of the firms operate is little better than some of the bucket shop operators seasoned with a dose of arrogance I find breathtaking.

      Francine has the kind of insight that few others are prepared to admit and for that she should be congratulated, even if, on occasion, I disagree.

      The world is a better place for her addition to what is often a very difficult debate.

    6. I can finally link back to this with an experience of my own, albeit not for a thoughtful e-mail.